Which of the Following Statements Is FALSE

question 27

Multiple Choice

Which of the following statements is FALSE?

• A)If the U.S.tax rate exceeds the combined tax rate on all foreign income,it is valid to assume that the firm pays the same tax rate on all income no matter where it is earned.
• B)Firms can lower their taxes by pooling multiple foreign projects and accelerating the repatriation of earnings.
• C)Under U.S.tax law,multinational corporations may use any excess tax credits generated in high-tax foreign countries to offset their net U.S.tax liabilities on earnings in low-tax foreign countries.
• D)If the foreign tax rate exceeds the U.S.tax rate,because the U.S.tax credit exceeds the amount of U.S.taxes owed,no tax is owed in the United States.

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Definitions:

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.

Liability

A financial obligation or amount owed by a business to another entity, which is expected to be settled in the future.

Capital

The wealth, either financial or tangible, that is used in the creation of more wealth, such as money or assets owned by an individual or organization.

Ledger

A comprehensive accounting book that keeps track of all financial transactions systematically.